I can’t afford to pay my suppliers – what can I do?
First things first, establish whether you are under an obligation to make payment. If you’ve already received the goods/services then it’s likely that you will need to make payment even if you do not have a written contract in place. If you haven’t yet received the goods/services then you may still be under an implied or express obligation to do so. Implied terms of a contract derive in part from custom and practice and past conduct so consider what is standard in your industry and how the parties have acted in the past.
If you do have a written contract then consider its terms carefully especially the following provisions: payment terms, termination, consequences of termination and force majeure.
Of course, in such circumstances communication can go a long way – if you can’t afford to make the whole payment now could you agree to make part payment or payment by instalments?
My clients/customers haven’t made payment – what can I do?
See answer above!
- Establish the basis upon which you were expecting payment.
- Consider your contract – do its terms help or hinder?
- Communicate – talk to your client/customer and see if you can agree a sensible way forward
It is also well worth checking to see whether your contract contains a dispute resolution mechanism as you may be obligated to resolve disputes via a particular process including alternative dispute resolution.
If you need any advice or assistance:
- understanding your contractual rights and obligations; or
- ensuring you have a written contract in place,
please contact the Corporate and Commercial Team at Poole Alcock on 0800 389 7093 or complete a contact form and we will call you back.
How can I best protect my business and myself should I or my co-shareholder become unwell?
Where a company has more than one shareholder it is important for those shareholders to consider how their relationship will be regulated. The articles of association provide some mechanisms for regulating the relationship between company shareholders but the articles of association are a publicly available document and so it is wise to consider if private regulation is needed too.
A shareholders’ agreement is a private contract entered into between shareholders of a company (and sometimes the company itself); it can cover some or all of the following:
- How the shareholders will vote on certain matters;
- Restrictions on shareholders competing with the company;
- What will happen in the event of a shareholder becoming bankrupt or wishing to leave the company;
- What will happen in the event that a shareholder becomes unwell or dies.
Whilst it may seem morbid to consider you or your co-shareholders becoming unwell or dying, it is important to make provision for such eventualities to avoid disputes later down the line.
If you need any advice or assistance:
- understanding your existing shareholders’ agreement; or
- putting a shareholders’ agreement in place,
please contact the Corporate and Commercial Team at Poole Alcock on 0800 389 7093 or complete a contact form and we will call you back.
How can I limit my personal liability for business debts and obligations?
As a sole trader or partner in a partnership you have personal liability for the debts and obligations of your business. In these uncertain times, such personal liability can be very worrying. One of the key ways to protect your personal assets and wealth from your business’ liabilities is to form a limited liability company.
A limited liability company is a separate legal entity to those who own or manage the company and therefore the personal wealth and assets of a company’s owners/officers are not at risk even if the company cannot meet its debts and obligations.*
*It is worth noting that there are exceptions to this default position including if you have a signed a personal guarantee as a company director.
If you need any advice or assistance:
- understanding your liability for business debts; or
- incorporating a limited liability company,
please contact the Corporate and Commercial Team at Poole Alcock on 0800 389 7093 or complete a contact form and we will call you back.
